Bitcoin Price Rallies Amid ETF Inflows Nearing Record $1B Per Day

• Unprecedent inflows into U.S. Bitcoin ETFs, nearly reaching $1 billion daily have driven Bitcoin’s price close to all-time highs.
• Some experts warn that such huge inflows could lead to a market correction if they trigger a “local top” for Bitcoin’s price, as recorded in previous high-inflow periods.

Bitcoin price has seen a resurgence in its price value. Majorly, this increase has been fueled by the unprecedented inflows into the Bitcoin ETFs which saw inflows of up to $1 billion in a single day. Notably, on October 30 alone, institutional investors poured almost $900 million into spot Bitcoin ETFs, making it the second-highest single-day inflow on record.

Nevertheless, there is a caveat, some experts have come out warning that such large inflows despite being a positive sign, could lead to a price correction if a “local top” for Bitcoin is triggered. 

It is worth mentioning that similar cases have happened according to mark cullen who stated that ;

The last couple of times the Bitcoin ETF flows were ~$900m+ and Price was > 70k, it signaled a local top

Taking to the X platform , a Crypto analyst via a thread voiced caution about potential “ETF FOMO” among investors, concerned that heavy ETF buying could once again form a temporary peak in Bitcoin’s price.

Cullen noted that similar high inflows in March marked a consolidation period following Bitcoin’s all-time highs, which led to months of price stagnation. This time, the fear is that huge inflows could bring about prices unsustainably.

Generally, the institutional appetite for this investment vehicle has risen splendidly. On the other hand, being the first crypto ETF to enter the U.S. market, the desire for Bitcoin ETF is still significant. The market appears somewhat better equipped to handle these inflows than earlier in the year.

CryptoQuant, an on-chain analytics platform, highlighted that Bitcoin availability on over-the-counter (OTC) desks has improved, allowing ETFs to buy Bitcoin with minimal impact on the spot market price. 

Currently, total daily Bitcoin purchases from ETFs represent between 1% and 2% of the total Bitcoin balance on OTC desks. This contrasts with a share of 9%–12% of total OTC balances in Q1 2024.

Bitcoin’s continued upward momentum hinges on the sustained growth of ETF demand. While OTC desks have recently increased their Bitcoin holdings by a modest 3,000 BTC over the past 30 days, this growth rate is notably slower than the rapid expansion seen in mid-2024. 

Following a surge in Bitcoin ETF inflows, Bitcoin traded near $72,000, approaching its all-time high in US dollars. This is because Bitcoin has already reached record highs in multiple global currencies.

William Clemente, co-founder of Reflexivity Research, suggested that the success of BlackRock’s iShares Bitcoin Trust (IBIT), which saw $875 million in net inflows on October 30, may spur further buying interest among institutions. 

Additionally, Bloomberg analyst Eric Balchunas estimates that ETF holdings could soon surpass one million BTC, reaching as much as $30 billion in assets under management within a mere 293 days, an exceptionally rapid pace for any ETF product.

Ok we gonna need to move up our predictions as yest alone the btc ETFs gobbled up over 12k coins like Pac-Man on a bender, now hold 996k btc- good chance to pass 1 million today (as the ridic volume yest likely to translate to big flows tonight). Legit shot to get to Satoshi by… https://t.co/Ua9GzhsBwE pic.twitter.com/84bBprhi6I

— Eric Balchunas (@EricBalchunas) October 30, 2024

At the time of writing, Bitcoin has plummeted in the daily charts, swapping hands with $69,452.35 marking a 3.98% decline. On the other hand, the king of crypto is still up 2.84% in the monthly charts.